APFA President Says the Airline is Hurting

Eight Years Under the Restructuring Agreement and APFA is Still Promoting the Company's Financial Rhetoric

Hotline message from APFA president Laura Glading.

We've been in negotiations with the company for almost three years without a contract. Our anger with the company and frustration with the National Mediation Board (NMB) is at an all-time high. Negotiations, however, do not happen in a vacuum. We must continually evaluate not only our immediate circumstances, but also those of the airline industry, the nation's economy and international events.

In our meeting with the NMB in mid-February, the Board members indicated that their decision to release a party into a cooling-off period was based, in part, on the financial condition of our airline and the nation's economy. Although American suffered the only loss among major airlines in 2010, we were hopeful that it would recover this year. Unfortunately, that does not appear to be the case. Analysts are now predicting that it will lose over $300 million in the first quarter and that it will remain in the red for the year. These projections were made before the recent earthquake and resulting tsunami that devastated Japan. These tragic events disrupted American's operation and will, for the time being, reduce American's revenue in the Pacific. It will undoubtedly have a more dramatic impact on the revenues of our Oneworld partner Japan Airlines (JAL). American was relying on our new Haneda routes and JAL's partnership to bolster our position in the region. Since March 11, our members once again are demonstrating their dedication and commitment to their jobs, performing their duties in the midst of this turmoil.

Yet another indication of American's problems is the difficulty it had in selling securities that it issued earlier this month. On March 7, American Airlines announced a public offering of $1 billion in bonds — effectively borrowing from institutional investors over a five-year period. But investors' response was less than enthusiastic. They questioned the value of the collateral package American had put together and whether it was sufficient to support a $1 billion loan. According to one analyst, because the collateral was considered "fairly weak," investors were demanding that American pay a higher interest rate than it initially anticipated. As a result, the company will have to pay more for borrowing this money.

While American Airlines' lagging performance is not our fault, it is clearly becoming our problem.

As will the National Mediation Board, we must also consider the economic reality facing our country. Who could have imagined three years ago that this country would be in the financial state it is, with the unemployment rate hovering around 9 percent? The political reality is to a large extent defined by the state of the economy. Consequently, it is clear to us that the White House will avoid any kind of disruption. And we cannot lose sight of the fact that the National Mediation Board answers to the White House.

Based on the totality of these circumstances we must, reluctantly but realistically, conclude that the NMB will not release the parties into a thirty-day cooling off period any time soon.

We know Flight Attendants are hurting and I hear heartbreaking stories each and every day. Many of you are suffering, going through foreclosures, and not being able to pay bills and seeing your credit destroyed. Meanwhile, AMR Executives still refuse to recognize our sacrifices. And in their annual unconscionable display of excess they will once again take their undeserved bonuses next month while Flight Attendants and many Americans are struggling to make ends meet.

We are outraged and simply cannot ignore another year of overindulgence and greed on their part while we are overwhelmed with the uncertainty of our future. Events will be held around the system on April 20 to protest and expose their avarice, and to what lengths these executives will go to ensure they receive a lavish reward, despite a dismal performance. Additional information about these events is forthcoming.

This has been a long and difficult fight, and labor and collective bargaining are now under attack across American. We remain committed to not only getting a contract that Flight Attendants need and deserve but will continue to fight for the rights for labor and against the erosion of the middle class. Please read the document posted on my page at APFA.org for more information on the assault on workers' rights across our nation (http://www.apfa.org/images/national_officers/laura/assault_on_workers.pdf).

As has been the case since our negotiations began, we will leave no stone unturned and we are exploring all our options that could possibly result in reaching an agreement. To that end we will be meeting with the NMB's Director of Mediation Services in the coming weeks to discuss whether we could possibly reach a deal outside of a cooling-off period. We will keep you updated on all developments.

I want to thank each and every one of you for your hard work and determination. Over the past two weeks I have been reminded of the professionalism of our Flight Attendants in the face of the devastating events in Japan and continue to be inspired by you and honored to serve as your President.